SUPREME COURT OF AZAD JAMMU AND KASHMIR

(Appellate Jurisdiction)

PRESENT Ch. Muhammad Ibrahim Zia, CJ. Raja Saeed Akram Khan, J. Ghulam Mustafa Mughal, J.

Civil Appeal No. 70 of 2015 (PLA Filed on 25.08.2014)

1. AJK Government of the State of Jammu and Kashmir through its Chief Secretary, having his office at New Secretariat Complex, Lower Chatter, Muzaffarabad.

2. Finance Department, Azad Govt. of the State of Jammu and Kashmir through its Secretary Finance, having his office at New Secretariat, Muzaffarabad.

…. APPELLANTS

VERSUS

1. Muhammad Siddique Khan, Project Director, 3.2 MW Sharian Hydro Electric Project, Presently serving as Director Mechanical, HEB, Muzaffarabad.

…. RESPONDENT

2. Azad Jammu & Kashmir Hydro Electric Board, Muzaffarabad through its Managing Director, HEB, Muzaffarabad.

3. The Secretary Electricity having his office at New Secretariat Complex, Lower Chatter, Muzaffarabad.

4. Accountant General, Azad Jammu & Kashmir, Muzaffarabad.

…. PROFORMA RESPONDENTS

(On appeal from the judgment of the High Court dated

26.06.2014 in Writ Petition No. 1645/2011) ------------------------------

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FOR THE APPELLANTS: Raja Ikhlaq Hussain Kiani,

Additional Advocate-General.

FOR RESPONDENT NO. 1: Miss Kokab Al Sabah Roohi, Advocate.

Amicus Curiae: M/s. Raza Ali Khan, Syed Nazir Hussain Shah Kazmi, Raja Muhammad

Hanif Khan and Barrister Humayun Nawaz Khan, Advocates.

Date of hearing: 11.04.2017 JUDGMENT: Ch. Muhammad Ibrahim Zia, C.J.— The

subject-matter of the titled appeal by leave of the

Court is the judgment of the High Court dated

26.06.2014 through which the writ petition filed

respondent No. 1, herein, has been accepted.

2. The essential facts of the case are that a post

of Project Director in 3.2 Mega Watt Sharian Hydro

Electric Project was advertised in daily ‘Mohasib’ dated

06.08.2008. In pursuance, whereof, the appellant

participated in the test and interview. In consequence

to the test and interview, the appellant was

recommended and appointed as Project Director vide

notification dated 06.03.2009. He filed a writ petition

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on various grounds before the High Court on

21.10.2011 for payment of Project Allowance from

06.03.2009 to 12.05.2011. The learned High Court,

after necessary proceedings, accepted the writ petition

and directed the respondents to make payment of

project allowance in accordance with the

advertisement, hence this appeal by leave of the Court.

3. During hearing of this appeal the legal

proposition of public importance whether the writ

petition is maintainable in the matters involving the

contractual obligations, emerged. Keeping in the view

the importance of the proposition, in addition to the

counsel for the parties some eminent members of the

Bar were also requested to assist the Court.

4. Raja Ikhlaq Hussain Kiani, Additional

Advocate-General, the learned counsel for the

appellants after narration of necessary facts submitted

that the impugned judgment of the High Court is not

consistent with the principle of law and justice. The

respondent-petitioner has got no locus standi to file the

writ petition. He is estopped by his conduct. He further

argued that the writ petition has been filed for

enforcement of the contractual obligations and

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according to the celebrated principle of law the writ

petition for enforcement of contractual obligations is

not competent. He placed reliance on the case reported

as Azad Govt. & others vs. Neelum Flour Mills,

Muzaffarabad [1992 SCR 381] and submitted that the

impugned judgment of the High Court be set-aside by

accepting this appeal and consequently the writ petition

be dismissed.

5. Miss Kokab Al Sabah Roohi, Advocate, the

learned counsel for the respondent forcefully defended

the impugned judgment of the High Court and

submitted that it is quite consistent with the principle of

law and justice. The respondent approached the High

Court for protection of legal rights. It is not mere a

contract between the parties but the matter is relating

to the person performing functions in connection with

the affairs of the Azad Jammu and Kashmir. In this

case, sheer violation of law has been committed and

the respondent has been deprived of his vested legal

rights. Therefore, this appeal has no substance and the

same is liable to be dismissed.

6. Mr. Raza Ali Khan, Advocate-General, on

Court’s direction argued the case. He submitted that

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although there is no absolute bar for maintaining the

writ petition involving contractual obligations, however,

it depends upon the nature and facts of each case. If

there is some violation of law or principle of law and

detailed inquiry or recording of evidence is not

required, the High Court may exercise the writ

jurisdiction but in the case wherein the factual

propositions are involved and recording of the evidence

is required, the writ jurisdiction may not be exercised.

7. Syed Nazir Hussain Shah Kazmi, Advocate,

the learned senior member of the Bar also argued the

case. He referred to the cases reported as Azad

Government of the State of Jammu & Kashmir & others

vs. Kashmir Timber Corporation [PLD 1979 SC AJK

139].

8. While assisting the Court, Raja Muhammad

Hanif Khan, Advocate, filed written notes and submitted

that the writ jurisdiction is an extraordinary jurisdiction

specially conferred upon the High Court. In the cases

where the state or its instrumentalities, act in arbitrary

and unreasonable manner the High Court may exercise

the writ jurisdiction even in the matters of contracts.

He referred to the cases reported as Kerala State

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Electricity Board & others vs. Kurien E. Kalathil & others

[AIR 2000 SC 2573], State of U.P. and others vs.

Bridge & Roof Co. (India) Ltd. [AIR 1996 SC 3515],

Mumtaz Ahmed vs. Zila Council, Sahiwal through

Administrator & others [1999 SCMR 117], Khadim

Hussain vs. The State [PLD 2010 SC 669] and

Sargodha Textile Mills Limited through General

Manager vs. Habib Bank Limited through Manager and

another [2007 SCMR 1240].

9. Same like, Barrister Humayun Nawaz Khan,

Advocate, while categorizing the writ petition submitted

that according to the constitutional spirit in case of

contract between the private parties the writ petition is

not maintainable because the writ petition can only be

filed against the person performing functions in

connection with the affairs of the Government or state.

The contractual rights regulated by the statutory

provisions or contracts which are based upon law and

established facts requiring no recording of evidence or

complicated factual propositions, can be enforced while

exercising the writ jurisdiction. He also filed the written

arguments and referred to number of cases some of

which are Lahore Cantonment Cooperative Housing

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Society Limited Lahore Cant, through Secretary vs. Dr.

Nusratullah Chaudhary & others [PLD 2002 SC 1068],

Mrs. M. N. Arshad & others vs. Miss Naeema Khalid &

others [PLD 1990 SC 612], Gul Marjan Khan vs.

Government of Punjab etc. [NLR 1999 UC 558],

Pakistan (through the Secretary Cabinet Secretariat

Karachi) vs. Moazzam Hussain Khan & another [PLD

1959 SC 13], Messrs Airport Support Service vs. Airport

Manager Quaid-i-Azam International Airport Karachi &

others [1998 SCMR 2268], Government of Pakistan

through Secretary, Ministry of Defence Rawalpindi &

others vs. Messrs Shoaib Bilal Corporation & 2 others

[2004 CLC 1104], Messrs Pacific Multinational (Pvt.)

Ltd. Vs. Inspector General of Police Sindh Police

Headquarter & 2 others [PLD 1992 Kar 283], Messrs

United International Associates through Managing

Partner vs. Province of the Punjab & another [1999

MLD 2745], Messrs Ittehad Cargo Service vs. Messrs

Syed Tasneem Hussain Naqvi & others [PLD 2001 SC

116], Shoukat Ali & others vs. Government of Pakistan

(through Chairman Ministry of Railway & others) [PLD

1997 SC 342] and Province of the Punjab through

Secretary Communication & Works, Government of

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Punjab, (Lahore) & 2 others vs. Messrs M. S.

Chaudhary through Construction Company through

Managing Partner [2002 YLR 1587].

10. We have considered the arguments of the

learned counsel for the parties as well as the eminent

lawyers who argued on Court’s direction. The learned

counsel for the appellants has relied upon the case

reported as Azad Government & others vs. Neelum

Flour Mills, Muzaffarabad [1992 SCR 381] wherein the

division bench of this Court has observed as follows:-

“We have consequently heard detailed arguments on this aspect of the case. We have also heard the learned counsel at some length in so far as merits of the case are

concerned. This Court has already laid down the law that contractual liability cannot be enforced through a writ petition in an un-reported judgment Mufti Nazir Hussain Vs. Azad Government (Civil Appeal No. 49 of 1979 decided on 2-1-1980); Mufti Nazir Hussain a retired District Qazi was re-employed as District Qazi as a stop-gap arrangement necessitated because of the absence of permanent District Qazi who had proceeded to Saudi Arabia for higher studies. His services were terminated after some time, whereupon Mufti Nazir Hussain filed a

writ petition in the High Court challenging the termination order. The main ground taken in the petition was that he had been re-employed on contractual basis that his service would continue till the return of the permanent incumbent from Saudi Arabia and his services therefore could not be terminated earlier. Violation of the principle of audi alteram partem was also made a

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ground of attack in the impugned order. The writ petition was accepted and the termination order was quashed. The Azad Government challenged the order of the High Court before this Court. The learned Advocate-General contended before this Court that no writ petition could lie to enforce a contractual obligation. This Court came to the conclusion that by getting the impugned order vacated all that Mufti Nazir Hussain wanted was the enforcement of contractual liability through a writ petition. Muhammad Aslam, J. speaking for the Court observed as follows:-

‘We find this objection quite forceful as there is no escape from the fact that such a writ petition for enforcement of service contract does not lie. It is well settled that for the enforcement of a contract or an agreement, relief cannot be allowed through a writ of mandamus and the superior Courts have refused to issue directions, as sought by the respondent herein, on the gorund that

proper remedy is available through a suit in the civil Courts. To cite a few authorities, we may refer to The Chandpur Mills ltd. V. The District Magistrate, Tippera and another (PLD 1958 SC 267), Pakistan V. Naseem Ahmad (PLD 1961 SC 445), Messrs Momim Motor Company V. The Regional Transport Authority, Dacca (PLD 1962 SC 108), M. Muzaffar-ud-Din Industries Ltd. V. The Chief Settlement and Rehabilitation Commissioner, Lahore & another (1968 SCMR 11636), Shamsahd Ali Khan V. Commissioner, Lahore (1969 SCMR 122) and Mir Rasoll Bux Khan Sundrani & Co. V. People’s Municipality, Sakkur and others (PLD 1975 Kar. 878). No doubt some of those authorities, as pointed out by the learned counsel for the respondent, pertain to agreements about property, but the principle

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enunciated in them is the same; namely that the Courts, while exercising extra-ordinary writ jurisdiction, do not issue orders or directions for the enforcement of contractual obligations. 1. Pakistan, and (2) Administrator of Karachi V. Naseem Ahmad (PLD 1961 SC 445) contain almost and identical case where the police employees sought through writ of mandamus a direction from the High Court for their re-instatement on the basis of service contract. The High Court issued the writ for restoring the Government servants to their offices. Against this decision, the Government went in appeal before the Supreme Court where over-ruling the High Court’s view, it was held ‘a writ of mandamus does not lie to restore a Government servant to office.’ In view of this state of law, and agreeing with the contention of the learned Advocate-General, we hold that the respondent herein could not seek his remedy as

stated in the writ petition, through the extra-ordinary writ jurisdiction of the High Court and if so advised, he could seek his relief through a suit before a civil Court.’

Having due regard and respect to the

judgment (supra), in our opinion, the matter has not

been exhaustively attended. According to the

constitutional provisions conferring the writ jurisdiction

upon the High Court, the basic condition for exercising

the writ jurisdiction is that the person performing

functions in connection with the affairs of the Azad

Jammu and Kashmir or the local authority is required to

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be directed to refrain from doing that which is not

permitted by law to do or to do that which is required

by law to do; and declaring that any act done or

proceeding taken by such person without lawful

authority. The other condition is absence of adequate

remedy provided by law for redressal of grievance of an

aggrieved person. Thus, in the Constitution there is no

specific provision expressly barring the exercise of writ

jurisdiction regarding the matters involving contractual

obligations and liabilities.

11. Commonly and generally the contracts are

governed by the Contract Act, 1872, however, there

may be some other special statutes dealing with the

matters relating to the contracts, thus, the contracts

are also made according to law and may be enforceable

under the provisions of law. Section 37 of the Contract

Act, 1872 may be referred and even the matters falling

within the purview of this statutory provision are based

upon law. Even in the matters relating to the property,

under the constitutional provisions the making of

contracts by the Government and the Council is also

recognized. In this regard section 52-A of the Azad

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Jammu and Kashmir Interim Constitution Act, 1974

reads as follows:-

52-A. Power to acquire property and to

make contracts, etc.-(1) The executive

authority of the Government and of the

Council shall extend, subject to any Act of

the appropriate authority to the grant,

sale, disposition or mortgage of any

property vested in, and to the purchase or

acquisition of property on behalf of, the Government or as the case may be, the

Council, and to the making of contracts.

(2) All property acquired for the purpose

of the Government or of the Council shall

vest in the President or, as the case may

be, in the Council.

(3) All contracts made in the exercise of

the executive authority of the Government

or of the Council shall be expressed to be

made in the name of the President or, as

the case may be, the Council and all such

contracts and all assurances of property made in exercise of that authority shall be

executed on behalf of the President or, the

Council by such persons and in such

manner as the President or as the case

may be, the Council may direct or

authorize.

(4) Neither the President, nor the

Chairman of the Council, shall be

personally liable in respect of any contract

or assurance made or executed in the

exercise of the executive authority of the

Government or, as the case may be, the Council, nor shall any person making or

executing any such contract or assurance

on behalf of any of them be personally

liable in respect thereof.

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(5) Transfer of land by the Government

or the Council shall be regulated by law.”

12. The constitutional provisions of the Azad

Jammu and Kashmir Interim Constitution Act, 1974,

the Constitution of Islamic Republic of Pakistan, 1973

and the Constitution of India regarding exercise of writ

jurisdiction by the High Court are almost identical. The

careful appreciation of the constitutional provisions

reveals that specifically, there is no absolute bar

provided in the constitutional provisions relating to

prohibition of exercise of writ jurisdiction regarding the

matters arising out of the contracts. For proper

appreciation of the scope of writ jurisdiction, we have

made a thorough survey of the legal precedents of the

apex and superior Courts of the sub- continent.

13. Some of the landmark pronouncements are

as follows.

The apex Court of Pakistan in the case

reported as Zonal Manager UBL and another vs. Mst.

Perveen Akhtar [PLD 2007 SC 298] while dealing with

this proposition has observed as follows:-

“4. We have carefully examined the above-noted contentions canvassed at bar by Mr. Sharifuddin Prizada, learned Advocate Supreme Court on behalf of petitioners, perused the available record as well as the

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order impugned. A bare perusal of the order impugned would reveal that it has been passed in a casual and cursory manner without having gone through the nature of controversy and affording proper opportunity of hearing to the petitioner. It is also ignored that by now it is well-settled that “contractual rights and obligations have to be enforced through Courts of ordinary jurisdiction. The High Court in exercising its writ jurisdiction will be loath to interfere in matters arising out of contractual obligations. The normal remedy at law being a suit for the enforcement of contractual rights and obligations, the High Court will not grant relief under Art.199 merely for the purpose of enforcing contractual obligations notwithstanding the very extensive nature of the power of the High Court under that Article. (Muzafaruddin v. Chief Settlement Commissioner (1968 SCMR 1136) Momin Motor Co. V. R.T.A. Dacca (PLD 1962 SC 108), Muhammad Ramzan v. Secretary Local Government, Government of Punjab (PLD

1987 Lah 262), Pakistan Miniseral Development Corporation Ltd. V. Pak. WAPDA (PLD 1986 Quetta 181), Chandpur Mills Ltd. V. District Magistrate Tippera (PLD 1958 SC 267), Chattar Singh v. State of Punjab (AIR 1953 Punjab 239) Raghavendra Sing v. State of Vindhya Pradesh (AIR (39) 1952 Vindya Pradesh 13). We are conscious of the fact that “where rights are based on statute law or rules framed thereunder or when an obligation or duty vests in a public functionary or a statutory body, performing functions in relation to the affairs of the

federation or a province are a local authority, constitutional jurisdiction can be attracted. In such situations even contractual rights and obligations may be enforced in constitutional jurisdiction. This, however, is subject to the important rider of corresponding absence of an adequate remedy.”

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In the case titled Brig. Muhammad Bashir vs.

Abdul Karim & others [PLD 2004 SC 271], it has been

observed that:

“12. Mr. Muhammad Zaman Bhatti, learned Advocate Supreme Court on behalf of official respondents failed to point out any such resumption order and could not explain satisfactorily how the respondents had failed to satisfy the conditions of allotment as contemplated in the notification dated 7.2.1968. The Deputy Collector/Collector had

acted not only capriciously but in an

arbitrary manner can be as a classic

example of abuse of performed his duties

in a casual and careless manner and his

indifferent approach is highly

condemnable. How the land could have

been allotted in view of the status quo order passed by Member, Board of

Revenue qua the said land which makes it

abundant clear that the land in question

was not "land available” for the purposes

of allotment. The allotment was also in

violation of Condition No.5 of the

notification dated 7-2-19 as mentioned

above. In view of the above glaring

illegalities, highhandedness and

arbitrariness of the revenue authorities

the order dated 19-8-1995 has rightly

been declared as unlawful. We are not persuaded to agree with Sardar

Muhammad Ghazi, learned Advocate

Supreme Court for appellant that the

scope Article 199 is limited and such like

controversy could not have been dilated

upon and decided by the High Court while

exercising Constitutional jurisdiction for

the simple reason that record was crystal

clear and accordingly the controversy

being not ticklish and complicated could

have been decided. It is well settled by

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now that "Article 199 casts an obligation

on the High Court to act in aid of law,

protect the rights the citizens within the

framework of the Constitution against the

infringement of law and Constitution by

the executive authorities, strike a rational compromise and a fair balance

between the rights of the citizens and the

actions of the State functionaries, claimed

to be in the larger interest of Society. This

power is conferred on the High Court

under the Constitution and is to be

exercised subject to Constitutional under

the Constitutional limitations. The Article

is intended to enable the High Court to

control executive action so as to bring it in

conformity with the law. Whenever the

executive acts in violation of the law an appropriate order can be can be granted

which will relieve the citizen of the effects

of illegal action. It is an omnibus Article

under which relief can be granted to the

citizens of the country against

infringement of any provision of law or of

the Constitution, If the citizens of this

country are deprived of the guarantee

given to them under the Constitution,

illegally or, not in accordance with law,

then Article 199 can always be invoked for

redress.” (Ghulam Mustafa Khan v. Paksitan and others PLD 1988 Lah. 49,

Muhammad PLD 1956 Kar, 538(FB)

Hussain Khan v. Federation of Pakistan

PLD 1956 Kar. 538 (FB), S.M. Yousuf v.

Collector of customs PLD 1968 Kar 599

(FB). It is to be noted that “paramount

consideration in exercise of Constitutional

jurisdiction is to foster justice and right a

wrong”. (Rehmatullah v Hameeda Begum

1986 SCMR 1561, Raunaq Commissioner

PLD 1973 SC 236), There is no cavil with

the proposition that “so long as statutory bodies and executive authorities act

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without fraud and bona fide within the

powers conferred on them by the statute,

the judiciary cannot interfere with them.

There is ample power vested in the High

Court to issue directions to an executive

authority when such an authority is not is not exercising its powers bona fide for the

purpose contemplated by the law or is

influenced by extraneous and irrelevant

considerations. Where a statutory

functionary acts mala fide or in a partial,

unjust and oppressive manner, the High

Court in the exercise of its writ jurisdiction

has ample power to grant relief to the

aggrieved party”. (East and West

Stemaphsip Co. v. Pakistan PLD 1958 SC

(Pak.) 41). In our considered view,

technicalities cannot prevent High Court from exercising its Constitutional

jurisdiction and affording relief which

otherwise respondent is found entitled to

receive.”

In the case reported as Nizamuddin & others

vs. Civil Aviation Authority & others [1999 SCMR 467],

it has been held that:

“From the arguments advanced at the bar

by both the sides it is clear that as no

tender had been issued in respect of the sole shop in terminal No.2, therefore, the

appellants had no basis these redress

regarding the said shop. It is also to be

noted that the appellants had not

specified any shop in terminals Nos.1 and

3 against which they have preferential

claim. Moreover it could not be shown that

any shop was lying vacant so that the

claim of the appellants could be

considered about it. It appears that all

those who had been successful in

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obtaining shops in the disputed terminals

have neither been impleaded nor it has

been pleaded that the appellants had

better claim against them. Keeping in

view all these material defects hurdles in

the way of the appellants in enforcing their right it was not possible for the High

Court nor for this Court to give any relief

to the appellants, therefore, all the

submissions made at the bar would

remain only of academic, interest.

However, it can hardly be disputed by any

one that for a society which claims to be

organized civilized and law abiding it is

imperative to standby its commitments,

undertakings and to be honest and fair in

its dealings, it is moreso for a Government

respecting rule of law not to discriminate between its citizens and its functionaries

cannot be allowed to exercise discretion at

their whims, sweet-will or as they please;

rather they are bound to act fairly, the

perusal of all the precedent cases cited at

the bar by the learned counsel for the

appellants enjoins and enunciate with

emphasis the above principle, therefore,

there is no need to refer to each of them.

The argument advanced by the learned

counsel for the appellants that as the

latest trend of superior Courts in our country and also elsewhere is to enlarge

the scope of judicial review, therefore,

availability of alternate remedy or matter

involving contractual obligation should not

pose hurdle in exercise of power of judicial

review under Article 199, is too wide and

sweeping to be adopted in every case. It

is axiomatic principle of law that every

case is to be adjudged on its own facts,

circumstances and merits. If in a

particular case both the parties admit the

factual aspect which give rise to the dispute and the Court feels that the

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matter is of such an urgent nature that

the very remedy would get frustrated, if

the aggrieved party is directed to seek

redress through alternative remedy

available under the law, then in that case

it would be proper for the Court to entertain the writ petition. Similarly if

through alternative remedy an of lower

authority is to be impugned before a

higher authority at whose behest the

action is taken or is passed then that

cannot be termed as an adequate and

efficacious remedy so as to justify refusal

of exercise of judicial review. If in every

contractual matter giving rise to

enforcement of contractual obligation of a

dispute which can be redressed through

other remedy available under the law writ petitions are entertained, then this would

defeat that very purpose of law and which

competent Courts are established and

vested with jurisdiction under the law.

Appellants could also not reasonably

complain of discrimination or violation of

Article 25 of the Constitution which

provides equal treatment to persons

placed under similar circumstances. The

plaintiffs who resorted to legal remedy for

the redress of their grievance and on the

basis of certain settlement between them and the in those proceedings they were

held entitled to same concession, cannot

be equated with the appellants who

remained silent spectators in the contest

between the said two parties. Therefore,

the disadvantage which was sought to be

remedied through the Writ Petition was

because of the appellants' own default and

omission. The decision of the respondents

in creating two classes in the tender for

the purpose of some concession in the bid

was because of the compromise in the suits be treated as arbitrary or perverse

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classification, rather this classification is

founded on sound and rational basis.”

In the case reported as Messrs Airport

Support Services vs. The Airport Manager & others

[1998 SCMR 2268].

“…As was pointed out by Muhammad Afzal

zullah, J., (as he then was) in Rashid A.

Khan v. West Pakistan Railway Board, PLD

1973 Lahore 733, a distinction is to be

made between an ordinary contract and a

contract through the process of tender. In

the latter case, any serious contravention

of rules instructions may not be accepted

as lawful and a public functionary may

even be personally required to make good

the loss attending upon such an illegality.

The instant case, therefore, is distinguishable inasmuch as the contract

was a result of private negotiations and,

thus, not endowed with the sanctity

attaching to a higher plane, when a

contract follows upon a due, open and

public process. This, in turn, should be

caution enough to the officers of the C.A.A

that all further contracts fully abide by

institutional and public norms. Much the

same was observed by the Indian

Supreme Court in Mahabir Auto Stores v.

Indian Oil Corporation, AIR 1990 Supreme Court 1031, where, in relation to

contractual rights having a public element,

it was stated that the manner, the

method and the motive of a decision of

entering or not entering into a contract by

a public functionary was open to judicial

review on the touchstone of

reasonableness, relevance, fairplay,

natural justice equality and non-

discrimination, It seems to me that even

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where no challenge is made to a public

contract on such a yardstick the Court

cannot be oblivious to the considerations

when called upon to give effect to the

same. More than this and anything

beyond statements of principles need not, in view of the order proposed

bereinbelow, be treated here.” On the same proposition from the High Court

jurisdiction the cases which can be referred to are Haji

Amin vs. Pakistan Trading Corporation & another [PLD

2009 Karachi 112], Messrs Wak Orient Power and Light

Limited vs. Government of Pakistan and others [1998

CLC 1178 (Lahore)] and Yousaf A. Haroon vs.

Custodian of the Karachi Hotel [2004 CLC 1967

(Karachi)].

The apex Court of India in the case reported

as Vencil Pushpraj v. State of Rajasthan [AIR 1991

Supreme Court 536] observed that:

“17. We are, therefore, unable to accept the argument of the learned Additional Advocate-General that the appointment of District Government Counsel by the State Government is only a professional engagement like that between a private client and his lawyer, or that it is purely contractual with no public element attaching to it, which may be terminated at any time at the sweet will of the Government excluding judicial review. We have already indicated the presence of public element attached to the ‘office’ or ‘post’ of District Government Counsel of every category covered by the

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impugned circular. This is sufficient to attract Article 14 of the Constitution and bring the question of validity of the impugned circular within the scope of judicial review.

18. The scope of judicial review

permissible in the present case, does not

require any ate consideration since even

the minimum scope of judicial review on

the ground of arbitrariness or

unreasonableness or irrationality, once

Art. 14 is attracted, is sufficient to

invalidate the impugned circular later. We need not, therefore, deal at length with

the scope of judicial review permissible in

such cases since several nuances of that

ticklish question do not arise for

consideration in the present case.

19. Even otherwise and sans the public

element so obvious in these

appointments, the appointment and its

concomitants viewed as purely contractual

matters after the appointment is made,

also attract Art. 14 and exclude

arbitrariness permitting judicial review of the State action. This aspect is dealt with

hereafter.” In the case reported as Mahabir Auto Stores

and others vs. Indian Oil Corporation and others [AIR

1990 Supreme Court 1031], it has been held by the

apex Court of India that:

“17. We are of the opinion that in all such cases whether public law or private law rights are involved, depends upon the facts and circumstances of the case. The dichotomy between rights and remedies cannot be obliterated by any straight jacket formula. It has to be examined in each particular case. Mr. Salve sought to urge that there are certain cases under

23

Article 14 of the arbitrary exercise of such “power” and not cases of exercise of a “right” arising either under a contract or under a Statute. We are of the opinion that that would depend upon the factual matrix.

18. Having considered the facts and circumstances of the case and the nature of the contentions and dealings between the parties and in view of the present state of law, we are of the opinion that decision of the State / public authority under Article 298 of

the Constitution, is an administrative decision and can be impeached on the ground that the decision is arbitrary or violative of Article 14 of the Constitution of India on any of the grounds available in public law field. It appears to us that in respect of Corporation like IOC when without informing the parties concerned, as in the instant case of the appellant firm herein on alleged change of policy and on that basis action to seek to bring to an end the course of transaction over 18 years involving large amounts of money is not fair action, especially in view of

the mono-polistic nature of the power of the respondent in this field. Therefore, it is necessary to reiterate that even in the field of public law, the relevant persons concerned or to be affected, should be taken into confidence. Whether and in what circumstances that confidence should be taken into consideration cannot be laid down on any straight jacket basis. It depends on the nature of the right involved and nature of the power sought to be exercised in a particular situation. It is true that there is discrimination (distinction) between power and right but whether the State or the instrumentality of a State has the right to function in public field or private fields is a matter which, in our opinion, depends upon the facts and circumstances of the situation, but such exercise of power cannot be dealt with by the State or the instrumentality of the State without informing and taking into

24

confidence, the party whose rights and powers affected or sought to be affected, into confidence. In such situations most often people feel aggrieved by exclusion of knowledge if not being taken into confidence.”

In the case reported as Messrs Ittehad Cargo

Service and others vs. Messrs Syed Tasneem Hussain

Naqvi and others [PLD 2001 SC 116], it has been

observed as follows:-

“8. The first contention urged in support of the petitions was that the High Court had no jurisdiction to entertain the respondent’s writ petition as the contacts challenged therein were concluded contracts.

We are afraid the contention cannot prevail

as it tends to curtail the scope of judicial

review by placing an uncanny on e

Constitutional jurisdiction of the High Court to test the validity of grant of a

concluded contract on the touchstone of

well-settled and well-known grounds of

challenge. No doubt a concluded contract

commands respect and its sanctity is to be

reserved as a matter of public

interest/public policy but this does not

mean that the order in respect of its grant

is sacrosanct and unassailable. The High

Court in exercise of its Constitutional

jurisdiction is possessed of power to

examine the validity of the order in regard to grant of a concluded contact and strike

it down on the grounds of mala fide,

arbitrary exercise of discretionary power,

lack of transparency, discrimination and

unfairness etc, provided the challenge is

made promptly and contentious questions

of fact are not involved. The view gets

support from the following observations

25

made in Messrs Support Services v. The

Airport Manager, International Airport,

Karachi and others (1998 SCMR 2268):-

‘Further a contract, carrying elements

of public interest, concluded by functionaries of the State, has to be

just, proper, transparent reasonable

and free of any taint of mala fides, all

such aspects remaining open for

judicial review. The rule is founded on

the premise that public functionaries,

deriving authority from or under law,

are obligated to act justly, fairly

equitably, reasonably, without any

element of discrimination and

squarely within the parameters of

law, as applicable in a given situation. Deviation, if of substance,

can be corrected through appropriate

orders under Article 199 of the

Constitution. In such behalf even

where a contract, pure and simple, is

involved, provided always that public

element presents itself and the

dispute does not entail evidentiary

facts of a disputed nature, redress

may be provided.’

The question was also considered in Messrs Pacific Multinational

(Pvt.) Ltd. Inspector-General of Police,

Sindh Police Headquarters and 2 others

(PLD 1992 Karachi 283) and it was

observed:

‘There could be no cavil with the

proposition that enforcement of a

purely contractual obligation could

not properly form the subject-matter

of proceedings under Article 199 of

the Constitution. However, it could

not be ignored that the State had a

26

Constitutional obligation to act fairly

even when performing an

administrative function. Therefore,

when a party complained before the

Court that the State while awarding a

contract to a party had acted in an unfair arbitrary manner or had

discriminated against one of the

parties contested for the award of the

contract, such grievance could looked

to by superior Court in exercise of its

of judicial review under Article 199 of

the Constitution and if the Court was

satisfied that the Government while

entering into a contract had acted

arbitrarily or in an unfair manner or

had discriminated between the

parties before it in matter of awarding the contract, it could

interfere and strike down such

action.’ The apex Court of India in the case reported

as Kerala State Electricity Board and another vs. Kurien

E. Kalathil and others [AIR 2000 Supreme Court 2573],

while considering the foreclosure of all other remedies

by lapse of time, justified the grant of relief under the

writ jurisdiction as follows:-

“12. Ordinarily, in view of aforesaid conclusions on the first contention, we would have allotted the appeal and directed dismissal of the writ petition (O.P 283 of 1995) without examining the second

contention. However, despite holding that

the dispute n question could not agitated

in a writ petition and thus the High Court

wrongly assumed jurisdiction in the facts

of the case not inclined in the exercise of

27

our power under Article 136 of the

Constitution, to dismiss the writ petition of

the contractor at this stage because that

is likely to result in miscarriage of justice

on account of lapse of time which may

now result in the foreclosure of all other remedies which could otherwise be availed

of by the contractor in the ordinary

course. Those remedies are not efficacious

at the present stage and, therefore, in

view of peculiar circumstances of the

case, we have examined the second

contention and the factors which weighted

with the High Court in granting relief.” The apex Court of Pakistan in the case

reported as Lahore Cantonment Cooperative Housing

Society vs Dr. Nsuratullah Chaudharyand others [PLD

2002 Supreme Court 1068] has stated exception for

exercise of writ jurisdiction. The disputed question of

fact particularly referring to a contractual liability

requires extensive recording of evidence. In fact, this

principle is applicable to all the writs as according to

general consensus of the Courts, the disputed

questions of fact cannot be resolved in writ

jurisdiction.

“5. It is an admitted fact that what was

challenged before the High Court under

Article 199 of the Constitution was the

cancellation of a contract. Both the parties

had serious allegations against each other

and each had accused the other for violating the terms and conditions of the

28

contract. What were the terms and

conditions and how were those violated

practically by any of the parties involves

not one but numerous questions of fact

which required the recording of evidence.

Such disputed questions of fact pertaining to contractual liability could not be dealt

with by the High Court in Constitutional

jurisdiction under Article 199 of the

Constitution. In Secretary to the

Government of the Punjab, Forest

Department, Punjab, Lahore through

Divisional Forest Officer v. Ghulam Nabi

(PLD 2001 SC 415-430) this Court has

already held that disputed questions of

fact cannot be gone into while exercising

jurisdiction under Article 199 of the

Constitution.

6. In Shah Wali v. Ferozuddin

(2000 SCMR 718-722-B) and in Syed Asif

Majeed v. A.D.C./© ASC (L), Lahore

(2000 SCMR 998-1000-D) this Court has

resolved that factual controversies should

not be entered into while exercising

jurisdiction under Article 199 of the

Constitution investigation into disputed

questions of fact was deprecated in

Punjab Small Industries Corporation v.

Ahmad Akhtar Cheema (2002 SCMR 549-553). The crux of all these findings is that

whenever there is a disputed question of

fact particularly referring to a contractual

liability, it requires the extensive

recording of evidence and hence only a

Civil Court is competent to do that. As the

recording of evidence is not permissible in

exercise of writ jurisdiction, the very

entertainment of writ petition in the

circumstances is totally unwarranted. In

Muhammad Mumtaz Masud v. House

Building Finance Corporation (994 SCMR 2287) and Shamshad Ali Khan v.

29

Commissioner, Lahore (1969 SCMR 122-

123-A) this Court has already resolved

and the same is once again reiterated that

no writ can be filed to enforce contractual

liability. In the instant case, the

respondents had decidedly filed a writ petition in order to enforce contractual

liability. In view of the known principles of

law such contractual liability could not be

enforced because with regard to the terms

and conditions of the contract and regard

to numerous acts and allegations of the

parties nothing could have been resolved

without the recording of evidence. We are

of the considered opinion that the writ

petition in hand was unlawfully

entertained. This alone is by itself

sufficient to set aside the impugned order.”

14. It is also worth mentioning that the

contracts are also creation of law and are legally

enforceable. In some cases, the violation of

condition of contract amounts to violation of law as

envisaged under section 37 of the Contract Act,

1872. The referred section reads as follows:-

“37. Obligation of parties to contract: The

parties to a contract must either perform,

or offer to perform, their respective

promises, unless such performance is

dispensed with or excused under the

provisions of this Act, or of any other law.

Promises bind the representatives of the

promisors in case of the death of such

promisors before performance, unless a

30

contrary intention appears from the

contract.”

The Lahore High Court in the case

reported as Messrs Wak Orient Power and Light

limited vs. Government of Pakistan and others

[1998 CLC 1178], observed that:

“12. It is clear that the trend of

authorities has now changed and remedy

of writ is permitted to be resorted to in

cases involving contract between a private

person and State/statutory functionary as

it is considered to be more efficacious and

speedy remedy as compared to a civil suit

or arbitration proceedings.

13. We find that Supreme Court of

Pakistan has in a later judgment, i.e.,

Majlis-e-Intizamia v. Ghulam Muhammad

Abid (PLD 1975 SC 355) and upheld the

view of High Court that a person whose

lease was illegally cancelled by the

Government could competently invoke

writ jurisdiction. We respectfully follow

this rule of law. As regards the presence

of arbitration clause in the agreement,

suffice it to say that arbitration proceeding

were likely to take long time to conclude and in the circumstances of the

present case, particularly so when the

facts are not seriously disputed, we

consider that remedy of writ is more

efficacious and speedy and the petitioner

cannot be denied due relief on the ground

of availability of forum of arbitration. We

may, with profound respect refer to the

case of Muhammad Ashraf Ali (1986 SCMR

1096), wherein their lordships of Supreme

Court have ruled that jurisdiction of High

Court to intervene under Article 199 in a

31

contractual matter between a private

person and statutory functionary like

Cooperative Board was not altogether

barred, despite the provision of arbitration

clause in the contract.

14. In the present case, the petitioner does not seek enforcement of

the terms and conditions of the contract

but asserts its rights against the action of

the State which is termed to be unlawful.

The breach of contract complained of on

the part of the State can be said to be

breach of statutory obligation and,

therefore, present writ petition is held to

be maintainable. The objection raised in

this behalf is overruled.

15. ………………………….

16. …………………………..

17. ………………………….

18. ………………………….

19. ………………………….

20. We have perused the “I.A.” to find

out as to whether indeed there was

condition for the opening of L/C in favour

of "K.E.S.E." within specified time but

could locate none. As regards the

second/alternate mentioned in the

impugned letter of termination of failure

to keep alive “Performance Guarantee" for

at least one month at all times, we find that this condition stood fulfilled at the

time of issuance of letter of termination.

Perusal of letter of the petitioner

(Annexure "R") (supra shows that the

performance Guarantee valid till 30th

September, 1997 had been provided in

favour of PPIB by the petitioner. It is

significant to note that correctness of

32

contents of this letter has not been

challenged by the respondents in their

replies as well as during the course of

arguments before us and as such the

facts, mentioned therein, would be

deemed to be stand admitted. As is evident the Financial Closing stood

achieved in all respects except opening of

letter of credit for which no period was

fixed.

In such a situation there is left no

option but to hold that the reasons

given in the impugned letter about

termination of "I.A." were non-existent.

No justification, whatsoever, was

available for PPIB to revoke an agreement

entered into between the petitioner and

respondent No.1. It need hardly be stressed that solemnity of contracts has to

be protected and honoured under the

prevalent statutory law more so keeping

in view the mandate of Holy Quran: A

Muslim who has submitted to the will of

Allah will honour the contract entered into

by him. See following version from the

Holy Qur’an:

۔۔۔"دویاایھاالدین آمنو اوفوا بالعق

“O You who believe; fulfil all obligations.”

All obligations must be

honoured, unless morally wrong. The Holy

Prophet (S.A.A.W.) observed the

conditions to treaty of Hudhaybia although

it meant that Abu Jandal, a new Muslim,

had to be retruend to the Quraysh envoy.

Once a Muslim has given his word, or

engaged in a legitimate contact, he must

see it through.

The last messenger of Allah

(peace be upon him) said, “The signs of a

hypocrite are three: (i) whenever he

33

speaks he tells a lie, (ii) whenever he

promises, he always breaks (his promise);

and (iii) If you trust him he proves to be

dishonest (If you keep something with

him as a trust with him, he will not return

it). (Abu Hurayrah-Sahib Al Bokhari 1.32).

21. ……………………………

22. …………………………..

23. While exercising writ jurisdiction,

which is essentially discretionary in

nature, superior Courts in Pakistan will not

hesitate a moment to refuse relief to a

suitor seeking enforcement of contract

against State or statutory Corporation, if

the national interest is thereby likely to be

endangered, in the least, despite the fact

that the legalistic right of such suitor for

issuance of appropriate writ stood established. Relief would also be refused if

the contract is shown to be

unconscionable/malafide/unreasonable or

against public policy.

24. Likewise, a situate may arise where

the Constitutional jurisdiction of this Court

under Article 199 may be permitted to be

involved by an aggrieved person for

declaration of the act of representative of

state/statutory Corporation, about

entering into a contract with third party,

to be without lawful authority, on the above grounds.

However, we find that there is no

basis, whatsoever, to hold that such a

situation has arisen in this case calling for

refusal to declare the impugned

termination of “I.A.” to be bad in law.”

15. In the light of above survey of

constitutional and statutory provisions of law as

34

well as relevant legal precedents of the superior

Courts of the sub-continent, it can safely be

concluded as follows:-

(i) there is no absolute bar for exercising writ

jurisdiction regarding the matters arising

out of the contracts or involving

contractual obligations or liabilities;

(ii) the extraordinary writ jurisdiction

conferred upon the High Court is of

paramount importance in the system of

administration of justice for redressal of

grievance if there is no other adequate

remedy available under law;

(iii) the determination of the adequacy and

availability of the remedy depends upon

the facts and nature of the case and the

High Court is the sole authority to decide

whether in view of the peculiar facts of the

case the exercise of writ jurisdiction is

justified or not. Mere availability of the

alternate remedy should not be a hurdle

in exercise of power of judicial review

under section 44 of the Azad Jammu and

Kashmir Interim Constitution Act, 1974,

when the matter is of an urgent nature

and if the aggrieved party is directed to

seek redress through alternate remedy

available under law the very remedy

35

would get frustrated, then it would be

proper for the Court to exercise the writ

jurisdiction;

(iv) It is celebrated principle of law that the

remedy of writ is not available against the

private person and the writ jurisdiction

can only be exercised when the person

performing functions in connection with

the affairs of Azad Jammu and Kashmir or

local authority is party and remedy

against him is sought in shape of writ of

prohibition, mandamus, certiorari, habeas

corpus or quo-warranto;

(v) even the contractual rights and obligations

may be enforced in the situation where

the rights are based on statute, law or

rules framed thereunder or when an

obligation or duty vests in a public

functionary or a statutory body,

performing functions in connection with

the affairs of the Azad Jammu and

Kashmir or local authority;

(vi) the acts of executive authority are subject

to judicial review and where a statutory

functionary acts mala fidely or in a partial,

unfair, unjust and oppressive manner, the

High Court in the exercise of its writ

jurisdiction has ample power to grant

relief to the aggrieved party. Same is the

36

case in the matters involving the

enforcement of fundamental rights,

specially, equal treatment to a person

placed under similar circumstances; and

(vii) there is also consensus of the superior

Courts in the light of enunciated principle

of law that ordinarily the exercise of writ

jurisdiction in the propositions requiring

detailed inquiry or recording of evidence

and intricated and complicated questions

of facts, is avoided. On the touchstone of

this principle the High Court may decline

to exercise the writ jurisdiction in the

matters of enforcement of contractual

obligations or rights and liabilities arisen

out of the contracts requiring detailed

inquiry or recording of evidence.

In our considered opinion, for the above stated

reasons, under the Constitution there is no specific

or absolute bar in exercising writ jurisdiction in the

matters of contractual obligations, liabilities or

claims based upon the contracts, subject to

hereinabove stated exception. Every case has to be

judged and decided according to its own peculiar

facts and circumstances, therefore, we hold that the

principle of law laid down in Neelum Floor Mills’s

37

case (supra) does not mean that there is an

absolute bar of exercising writ jurisdiction in the

matters involving the contractual obligations,

liabilities or the matters arisen out of the contracts.

15. In view of the above, the argument of the

counsel for the appellants that in this case the writ

petition being relating to the enforcement of

contractual obligation is not competent, has no

substance, hence, stands repelled.

16. So far as the peculiar facts and

circumstances of this case are concerned, no

detailed inquiry is required and the proposition

involved in this case can be determined on the

basis of undisputed record. The appellants are

persons performing the functions in connection with

the affairs of Azad Jammu and Kashmir. The

vacancy has been advertised and the respondent

was selected through the process completed in

furtherance of the advertisement. In the

advertisement, the amount of project allowance is

clearly mentioned. The notification of appointment

of the respondent clearly contains the amount of

38

project allowance as Rs.30,000/- per month. The

process of advertising the post, selection on merit

and issuance of the appointment notification is

based upon statutory rules and enforced policies,

thus, in this state of affairs, the learned High Court

has rightly exercised the writ jurisdiction. The

impugned judgment does not suffer from any

illegality or infirmity.

Therefore, finding no force this appeal

stands dismissed with no order as to costs.

Muzaffarabad, 18.05.2017 CHIEF JUSTICE JUDGE JUDGE